What is the potential financial exposure for RxSight if the lawsuit proceeds to settlement or judgment?

Potential financial exposure:

A securities‑fraud class action that reaches settlement or judgment can obligate RxSight to pay anywhere from a few million to a high‑double‑digit‑percentage of its market capitalization, depending on the size of the alleged losses and the strength of the plaintiffs’ case. As of the most recent trading session RxSight’s market‑cap hovers around $250 million (≈ $2.30 per share × ≈ 108 M shares outstanding). If the court were to order a typical “loss‑recovery” settlement—often 5‑15 % of market value for mid‑cap biotech fraud suits—RxSight could be looking at a liability of $12 M‑$38 M. In a worst‑case scenario where a jury awards punitive damages or the court finds pervasive misstatements, exposure could climb to 20 %–30 % of market cap, i.e., $50 M‑$75 M. Such a payout would materially strain the company’s cash reserves (which currently sit below $30 M) and likely force additional financing, dilutive equity raises, or asset sales.

Trading implications:

The litigation risk is already baked into the stock’s pricing (the news carries a –80 sentiment, and the share price has been volatile, trading in a tight $1.80‑$2.40 range on relatively low volume). Expect heightened short‑interest pressure and price spikes on any new developments (e.g., a filing of a settlement offer). For risk‑averse traders, a protective put positioned near the current price could cap downside while preserving upside if the case settles for less than market expectations. Conversely, speculative traders could consider buy‑the‑rumor / sell‑the‑news plays: accumulate on modest pull‑backs (e.g., < $1.80) and target a quick profit on any positive settlement news that could lift the stock toward its pre‑litigation highs (~$3.00). Monitoring the court docket, the company’s cash runway, and any disclosed settlement talks will be critical to adjust exposure promptly.